Deliver the Value: the IKEA Case Study

IKEA is a Swedish-owned global business founded in 1943.The business generates annual revenues of 27 billion euros and employs 139,000 people in 298 stores and 26 countries. The values and design philosophy of the founder continue to underpin the brand. These values might be summed up as frugal, democratic, environmentallyaware, and design oriented.

IKEA has become synonymous with Swedish lifestyle. The stores are virtually identical across the globe and sell a range of globally sourced flat-packed furniture products as well as a range of related furnishings for the home-the stores offer customers a Swedish experience by incorporating restaurants and a variety of customer services intended to simplify the shopping process (e.g., childcare). What is interesting about IKEA is that customers have become a significant part of the value creating process-customers play a key role in terms of logistics and in production.

By performingthe assembly of the flat-packed furniture, customers complete the final stages in the production process. In terms of logistics, the customer "moves" goods from warehouse-style storage through the checkout, and then transports the goods home. The trade-off for the consumer is lower prices and immediate gratification-furniture is typically sold using just in time (JIT) inventory management, which means that once a customer has placed an order, the furniture then goes into production and is delivered to the customer's home some 3-4 months later.

IKEA's senior management has in the past pursued an aggressive expansion policy, but management is currently changing direction, adopting a slower rate of expansion and investing in existing stores. The company plans to increase sales by 10% a year to 2020, thereby doubling annual sales revenues. Management is concerned about how expansion in the BRIC countries, specifically 'India', is pursued. There are fears about preserving the company's culture in these huge markets (Milne, 2013).

Sources:

http://www.ikea.com/ms/en_US/this-is-ikea/company-information/index.html

Milne, R. (2013, September 1). Ikea signals slower expansion. Financial Times.

What do you think? What would you do? What problems do you foresee and how will this impact IKEA's Swedish concept? Please recommend a marketing solution that will help IKEA achieve growth in India based on your understanding of the place P and how delivering the value is evolving.

Use the case study guidelines below to perform a brief analysis, identify the problem, suggest alternative solutions, and make recommendations for the implementation of the solution that you believe is the best fit.

Case Study Report:

You have 2 deliverables:

1. Write a brief 5-section paper (about 2-3 pages, double spaced, in addition to your title page, your table of contents page, and your reference page). Some online research is expected. The IKEA website is highly informative. Use APA format. Focus on addressing the 5 case study section guidelines (below) ...

2. Create 5 slides that are "support graphics" (as if you will be reading/presenting the report to Ikea's senior management team at a meeting).In the report, simply indicate when each slide should be displayed on the screen as you present ... include print-outs of the slides at the end of your paper (they are not to be considered as part of your report's 2-3 pages). 

Case Study Section Guidelines:  

1.      Analysis of the Current Situation-In one brief paragraph, establish the context for the case analysis; then provide the three following sub-sections (with sub-headings) -

• SWOT analysissub-section with a SWOT box.

• Research sub-section: Identify the key environmental factors such as industry trends, level of competitiveness, customer perceptions, legal considerations, and evolving technology at the outset of the analysis.

• Summarization sub-section:State the key aspects of the internal environment of the firm in terms of strengths and weaknesses and the external environment in terms of opportunities and threats to the firm in your SWOT box.

2.      The Target Market-Identify your target market:Who is your target customer in India?In terms of demographics and lifestyle, what aspects of consumer behavior provide insights into this group of customers?Present a specifically-focused 2-column Market Segment Analysis chart ... PLUS any additional information you feel is pertinent.

3.      The Problem-Identify key problem(s). It is easy to identify symptoms of problems while failing to identify the real problems. For example, declining sales may be identified as a problem, when ... in fact ...the decline is only symptomatic of more complex problems that are hardertoobserve.Make a clear distinction between what is identified as the problem and the symptoms of the problems.

4.      Alternative Solutions-Identify and evaluate alternatives that were also considered (but in the end; not recommended). View these as reasonable alternatives and evaluate them in terms of their feasibility, projected costs advantages, disadvantages, and potential short-term and long-term consequences.

5.      Recommended Course of Action-Present your selected'Marketing course of action' and introducethe appropriate strategies and tactics to accomplish the chosen course. Justify your choice in terms of your analysis. As most practitioners know, charting a course of action can be a difficult job, but implementation is the true challenge. Produce a workable action plan overview which would have a reasonable probability of success in the implementation phase. 

Format Guidelines:

Every assignment is to be formatted per APA guidelines and must include:

•  Correct content - In each draft of your plan, Submit only the content asked for in the specific assignment.

•  Title Page - Include plan title, course name & number, student name, & submission date)

•  Page header & running head, and page numbers on every page;

•  Table of contents (with page numbers);

•  Double-spaced text using Times New Roman 12-point type;

•  Section Headings using Times New Roman 16-point, Upper & Lower Case, flush left;

•  Sub-Headings (within sections) using Times New Roman 12-point, Upper & Lower Case, Bold Face, flush left;

•  Graphics & charts - must be easily readable and imbedded into the document at the appropriate locations. They cannot be attached as separate documents.

• Reference Page (presented in APA style). This page must be formatted exactly as described in doc #14 in doc sharing and have a clear referential connection to specific document content. See APA guidelines in doc sharing.

Slide Guidelines:

Your supporting slides must be presented within your case study 'word' document at the appropriate spots within your document (do not submit a separate PowerPoint document).

A professional Marketing slide presentation should be based on high quality content; and your slides should be clear and compelling - it is important to engage your audience and convey all of the important points that you have developed in your written report.Include inviting and appropriate graphics &artwork on each slide that relates to your verbiage - this is what your audience will want to see.

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